Rivian Automotive to build EV manufacturing plant in Georgia

On September 26, 2023, Rivian Horizon, LLC, a subsidiary of Rivian Automotive, the State of Georgia acting by and through the Georgia Department of Economic Development, and the Joint Development Authority of Jasper County, Morgan County, Newton County and Walton County entered into the First Amendment to the Economic Development Agreement, which amends the Economic Development Agreement, dated May 2, 2022, among the Company and the Public Parties. Pursuant to the Agreement, the company agreed to build an electric vehicle manufacturing plant in Georgia and (i) create 7,500 new jobs for full-time employees at the Project and (ii) make a minimum capital investment of $5B in the Project. As consideration for and as a condition to the company Commitments, the Public Parties agreed to provide the company with various state and local incentives having an aggregate value of approximately $1.5B, including tax credits and exemptions, grants to offset eligible costs of the Project, site development and preparation and recruitment and job training programs for the Project. The Amendment modifies the period during which the company is required to maintain the company Commitments on an annual basis. As modified, the Performance Period commences on December 31, 2030 and expires on December 31, 2047. To the extent the company fails to achieve an average of 80% of the company Commitments in any year during the Performance Period, the company is required to make a repayment to the Public Parties of a pro rata portion of the total value of the Incentive Payments received by the company in such year. In addition, under the Agreement, the company agreed to make payments in lieu of taxes to the JDA annually during the term of the Rental Agreement between the JDA and company. The Rental Agreement will be executed by the JDA and the company at Closing. The minimum annual PILOT Payments start at $1.5M and gradually increase to $20.4M by 2047, and the PILOT Payments are subject to further increases as set forth in the Agreement if the Company exceeds its initial $5B Investment Commitment. The company has agreed to pay a minimum of approximately $300M in PILOT Payments over the course of the PILOT period. The Amendment further allows the company to seek a loan to provide an additional source of financing for the development and construction of the Project from a lender reasonably acceptable to the State and the JDA. In connection with the Loan, the company will be required to comply with certain conditions set forth in the Amendment, including but not limited to posting collateral reasonably acceptable to the JDA and the State as consideration for the State and the JDA subordinating their respective interests in the Project assets in favor of the Lender. For purposes of the Amendment, certain types of lenders are deemed acceptable to the State and the JDA. In addition, the Agreement included certain termination rights prior to the Closing. The Amendment provides for additional termination rights after the Closing, with the company able to terminate the Agreement (i) no later than April 1, 2024, if the State fails to provide the company with reasonable assurances by February 15, 2024, that the company’s use of the Project Site is exempt from local zoning and ordinances as a result of ownership of the Project Site by the State or (ii) no later than December 31, 2024, if the Loan is denied by the Lender for any reason, provided the company satisfies its obligations specifically associated with this particular termination right in the Amendment, including but not limited to payment of a termination fee and performance of certain removal/restoration requirements. The Closing is subject to the satisfaction or waiver of certain closing conditions, as specified in the Agreement. Pursuant to the Amendment, the company and the Public Parties have agreed to use commercially reasonable efforts to satisfy all conditions precedent to the Closing so that the Closing can occur on or before November 1, 2023.